Bloomberg: Distressed Debt’s Biggest Brawls Head for Courtroom Showdown
November 21, 2022
Investors have filed numerous lawsuits seeking to reverse transactions with companies that have sought emergency financing from debtholders. Over the past month, three suits have been filed against mattress maker Serta Simmons, cosmetics company Revlon Inc., and aircraft parts maker Incora. US bankruptcy and New York State courts are interested in hearing these cases, in which investors and companies are looking for guidance from judges on the limits distressed corporations have when they are in need of funding. “We’re seeing courts starting to push back,” said Daniel Shamah, co-head of O’Melveny’s bankruptcy litigation group. “It will be interesting to see how the combination of economic uncertainty and rising rates compel people to pursue more or less of these transactions.”
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